GME Calendar May 2015

[Vancouver]

Started a position in GME 39C calendar (long June 19, short May 29) @ $0.22.

In the previous cycle we paid $0.32 & $0.34, and exited at $0.35 & $0.38 so looks like a screaming buy.

Commissions are high on this one, but it seems like a good opportunity to me.

 

[luxmon]

There is a dividend in play making the June19 cheap, not sure if that was the case last time.  I'll see if I can dig it up.

[Kim]

Yes, I noticed that too. I believe it was the same last time - puts were also much more expensive that the calls. 

[craigsmith]

Thanks for the heads-up on this one.

 

Why are the puts so much more expensive?

[Yowster]

Vancouver - you are quick, I had this flagged to followup on in the next few days.  I can verify that the dividend was in play last cycle too (so the puts were more expensive than the calls at that time as well).

[luxmon]

Yes, I noticed that too. I believe it was the same last time - puts were also much more expensive that the calls. 

 

 

You're right, it was.  It is 0.03 more this quarter so that explains part of the lower price.  Nice find, Vancouver!

 

Update - the dividend was 0.03 more last quarter (0.36), this quarter's doesn't appear to be out yet.

Edited May 13, 2015 by luxmon

[Kim]

Just opened an official topic. Will be looking to start half position tomorrow.

[Optrader]

As far as calendar is concerned will put or calls expand with same amount ? i.e gains will be same either puts or calls ?

 

Also 40 call calendar  is OTM . So nobody will exercise it to get a dividend .

 

Considering this what is the risk of call v/s put calendar. 

They increased dividend last cycle .

[Vancouver]

Closed all my positions yesterday at 0.27. Still made some small money after commission, but clearly we didn't get the price action we wanted, and I prefer not to wait for the last day especially because this isn't a very liquid name.